EUR 120.00 For Business Accounts Only

MOSL: CAPITAL MARKET MONTHLY: Weakness observed across key parameters

With the markets witnessing steep correction during the past three months, the domestic brokerage industry has seen weak trends across key parameters. Incremental demat accounts and NSE active accounts declined 32% and 44% MoM in Jun’22, respectively. Further, retail cash segment volumes plunged 23%. The only parameter to have bucked the trend has been the F&O segment where ADTO continued to make new highs (+1.3% MoM). Angel One, which has a higher dependence on F&O income, performed relatively strongly with its order count remaining flat MoM. Conversely, ICICI Securities saw sharper decline owing to its relatively higher dependence on the cash segment.

 

Declining run-rate of Demat account additions

• Overall demat account increased to 97m as of Jun'22. However, the incremental account addition trend continues to remain weak with only 1.8m accounts being added v/s the average of 2.9m added over the past one year.
• CDSL continues to maintain its overall market share of 71%. NSDL, on the other hand, is continuously gaining market share in the incremental demat account addition at 21% v/s 13% last year.

 

Incremental NSE active accounts at a multi-month low

• Total industry active user clients jumped 70% YoY and 0.8% MoM to 38.0m. However, incremental active accounts were merely at 0.3m, which were the lowest since Mar'20 (pre-pandemic levels).
• Presently, the top 5 discount brokers account for 58% of the overall NSE active clients. However, post market share gains for a consecutive period of 15 months, they have seen marginal decline in market share for May and Jun'22.
• Groww, among other discount brokers continues to outperform with a growth of 3.6% MoM followed by Angel that grew 2.5%. Angel's NSE client base grew 3% to reach 4m. In terms of overall market share, Groww gained significant share (+559bp YoY and 32bp MoM) at the cost of Zerodha (-191bp YoY and 5bp MoM) and Upstox (+84bp YoY and -47bp MoM), while Angel has been able to improve its market share to 10.6% (+175bp YoY/ 18bp MoM).
• Among the traditional brokers, ISEC saw the highest growth of 1.9% MoM in NSE active clients, followed by HDFC Sec which rose 1.4%. ISEC managed to gain a market share of 15bp YoY and 9bp MoM to 8.4%.
• In terms of incremental active clients, Groww and Angel gained 1,382bp and 797bp MoM, respectively, while Upstox lost market share of 1,324bp. Most of the key traditional brokers except Kotak Securities have gained market share in incremental active clients on both YoY and MoM basis.